TIDMPMO
RNS Number : 4925K
Premier Oil PLC
22 April 2020
Premier Oil plc (the "Company")
2019 Annual Report and Financial Statements, Sustainability
Report and Revised AGM Date
22 April 2020
Publication of Annual Report and Sustainability Report
Further to the release of the Company's Annual Results on 5
March 2020, the Company announces that it has today published its
Annual Report and Financial Statements for the financial year ended
31 December 2019 (the "2019 Annual Report") and its 2019
Sustainability Report. The 2019 Annual Report was finalised and
approved after close of business on 4 March 2020. Since that date,
the COVID-19 pandemic has had a dramatic impact on the global
economy, and has contributed to the sharpest decline in oil price
in 20 years. As reported in a trading update on 13 March, the Board
of Directors are taking all prudent steps to manage the Company's
short term liquidity position, to reduce forward expenditure
commitments and to redefine the Company's future business plan,
given these new circumstances.
Revised AGM Date
In response to the Government's public health instructions and
stay at home measures regarding the COVID-19 pandemic, the Board
has taken the decision to defer the holding of the Company's 2020
Annual General Meeting ("AGM") from 12 May 2020 to 25 June 2020.
The Board is hopeful that circumstances will improve and that
shareholders will be able to attend the meeting at the later date
if restrictions on public gathering and social distancing
requirements are reduced. It is anticipated that the shareholder
mailing of the AGM notice and annual report will take place on or
around 22 May 2020.
Robin Allan, Executive Director, UK & North Sea, who was due
to leave the Board at the close of the AGM on 12 May 2020, has
agreed to stay on the Board until the close of the AGM on the
revised date of 25 June 2020. He will then continue to work for
Premier as planned, on a part-time consultancy basis, with a focus
on ESG matters and Premier's response to climate change.
Further detail regarding Annual Report
In accordance with Listing Rule 9.6.1., copies of the 2019
Annual Report have been submitted to the UK Listing Authority and
will shortly be available for inspection from the National Storage
Mechanism at www.morningstar.co.uk/uk/nsm . The 2019 Annual Report
is also available to view on the Company's website at
www.premier-oil.com
A condensed set of financial statements and information on
important events that have occurred during the year ended 31
December 2019 and their impact on the financial statements were
included in the Company's 2019 Annual Results announcement on 5
March 2020. That information together with the information set out
below in Appendix 1, which is extracted from the 2019 Annual
Report, fulfil the requirements of DTR 6.3.5. This announcement is
not a substitute for reading the full 2019 Annual Report. Page and
note references in the text in Appendix 1 are made in reference to
the 2019 Annual Report. To view the 2019 Annual Results
announcement, visit the Company website:
www.premier-oil.com/investors
Further enquiries:
Company Secretariat:
Rachel Rickard Tel: +44 (0)20 7730 1111
Investor Relations:
Elizabeth Brooks Tel: +44 (0)20 7730 1111
Disclaimer
This announcement contains certain forward-looking statements
that are subject to the usual risk factors and uncertainties
associated with the oil and gas exploration and production
business. Whilst the Group believes the expectations reflected
herein to be reasonable in light of the information available to it
at this time, the actual outcome may be materially different owing
to factors beyond the Group's control or otherwise within the
Group's control but where, for example, the Group decides on a
change of plan or strategy. Accordingly, no reliance may be placed
on the figures contained in such forward-looking statements.
APPIX 1
Company Risk Factors (required under DTR 4.1.8)
Principal risk factor Risk detail How is it managed?
-------------------------------------- -------------------------------------- --------------------------------------
Production and Uncertain geology, reservoir and well Effective management systems in place
development delivery performance. governing geoscience, reservoir and
and decommissioning well engineering,
execution Availability of oilfield services and production operations activities.
including FPSOs and drilling rigs, These include rigorous production
technology and engineering forecasting and reporting,
capacity, and skilled resources. field and well performance monitoring
and independent reserves auditing.
Adverse fiscal, regulatory, political,
economic, social, security (including Effective management systems in place
cyber) and weather governing project execution, including
conditions. contracting strategy,
cost controls, project team competency
Immaturity of decommissioning in the and functional oversight.
UK resulting in uncertain cost and
timing estimates for Long-term development planning to
decommissioning of assets. ensure timely and cost-effective
access to FPSOs, rigs and
Potential consequences include reduced other essential services.
or deferred production, loss of
reserves, cost overruns Preference for operatorship.
and failure to fulfil contractual
commitments. Specialist decommissioning team in
place coupled with continued focus on
delivering asset
value to defer abandonment
liabilities.
-------------------------------------- -------------------------------------- --------------------------------------
Joint venture partner alignment and Major operations and projects in the Due diligence and regular engagement
supply oil and gas industry are conducted as with partners in joint ventures in
chain delivery joint ventures. both operated and
The joint venture partners may not be non-operated operations and projects.
aligned in their objectives and this Defined management system for
may lead to operational management of non-operated ventures.
inefficiencies and/or project delays. Assure contracted dutyholders comply
Several of our major operations are with local statutory requirements
operated by our (e.g. UK Safety Case
joint venture partners and our Regulations 2015).
ability to influence is sometimes Pursue strategic acquisition
limited due to our small opportunities, where appropriate to
interest in such ventures. gain a greater degree of
Premier is heavily dependent on influence and control.
supply chain providers to deliver Due diligence of supply chain
products and services to providers, including diligence of
time, cost and quality criteria and financial solvency, anti-bribery
to conduct its business in a safe and and corruption controls, and controls
ethical manner. to prevent facilitation of tax
evasion.
Contractor performance management
programme being implemented for major
contracts to manage
contractual performance and delivery,
including periodic audit of the
effectiveness of their
management systems.
Long-term development planning to
ensure timely and cost-effective
access to key oilfield
services.
-------------------------------------- -------------------------------------- --------------------------------------
Organisational The capability of the organisation Premier has created a competitive
capability may be inadequate for Premier to reward package including bonus and
deliver its strategic long-term incentive plans
objectives. to incentivise loyalty and
The capability of the organisation is performance from the existing
a function its structure and the skilled workforce.
deployment and strength Continue to strengthen
of its personnel. organisational capability to achieve
Premier may be unable to attract, strategic objectives. This includes
engage or retain personnel with the resource and succession planning,
right skills and competencies competency and leadership
or to deliver suitable succession development.
plans for senior roles. Continuous improvement and
The Business Management System may be simplification of the Business
inadequate or may not be sufficiently Management System and related
complied with controls
to be effective. appropriate to the size and market
position of the Company.
Continued deployment of contingent
labour through a mature
cost-effective Managed Service
Provider ('MSP') model to rapidly
respond to the peaks and troughs of
labour demand in a volatile
environment.
Staff forums providing a mutual
communication forum between staff,
management and the Board
to address employee matters.
Continued focus on Diversity &
Inclusion across the Group.
Embedded Talent Management and
Succession Planning process.
Complete implementation of
recommendations emerging from
externally facilitated organisation
health check conducted end 2018.
Organisational capability and risk
oversight further enhanced by global
functional review
under new operating charter.
-------------------------------------- -------------------------------------- --------------------------------------
Exploration success and reserves Premier may fail to identify and Focus on proven petroleum systems
addition capture new acreage and resource underpinned by world-class source
opportunities to provide rocks and identify technical
a portfolio of drillable exploration or political discontinuities that we
prospects and future development can exploit using our preferred
projects. evaluation workflows
Specific exploration programmes may to create a competitive advantage.
fail to add expected resource and Continuous improvement in
hence value. exploration management system with
Lender controls may reduce ability strong functional oversight.
to capture and execute the
exploration programme. Manage exploration portfolio to
maintain alignment with strategic
growth and spend targets.
Maintain new ventures activity and
appropriate resourcing.
-------------------------------------- -------------------------------------- --------------------------------------
Commodity price volatility Oil and gas prices are affected by Oil and gas price hedging programmes
global supply and demand and can be to underpin our financial strength
subject to significant and protect our capacity
fluctuations. to fund future developments and
Supply factors that influence these operations.
include the pace of new oil and gas Company investment guidelines that
developments, operational ensure our investment opportunities
issues, natural disasters, adverse are robust to downside
weather, political and security price scenarios.
instability, conflicts
and actions by major oil-exporting
countries.
Demand factors that influence these
include economic conditions, climate
change regulations
and the pace of transition to a low
carbon economy.
Price fluctuations can affect our
business assumptions, our ability to
deliver on our strategy
and our access to capital.
-------------------------------------- -------------------------------------- --------------------------------------
Access to capital Sufficient funds may not be Strong financial discipline through
available to finance the business an established finance management
and fund existing operations system that ensures
and planned growth projects. the Company is able to maintain an
Current Amend and Extend to debt appropriate level of liquidity and
facilities not agreed by the courts financial capacity and
leading to renegotiations to manage the level of assessed risk
with lenders which may have adverse associated with the financial
consequences on the Group's ability instruments. The management
to refinance. system includes a defined delegation
Volatile credit markets, lender of authority to reasonably protect
appetite and investor sentiment may against risk of financial
impact ability to either fraud in the Group.
refinance debt at maturity and/or Proactive engagement with equity
raise equity on attractive terms. markets, banks and lenders to
Breach of delegated authority. maintain access to capital
Financial fraud. markets through the cycle.
An insurance programme to reduce the
potential impact of the physical
risks associated with
exploration and production
activities. This includes business
interruption cover for a proportion
of the cash ow from producing
fields.
Cash balances are invested in
short-term deposits with minimum A
credit rating banks, AAA
managed liquidity funds and A1/P1
commercial paper, subject to Board
approved limits.
Economics of investment decisions
are tested against downside project
scenarios.
Discretionary spend is actively
managed.
-------------------------------------- -------------------------------------- --------------------------------------
Health, safety, Significant asset integrity, process Comprehensive HSES management systems
environment safety or wells incident on operated including:
and security asset. HSES reporting and auditing with a
('HSES') Significant incident arising from focus on the identification and
natural disaster, pandemic, social management of major hazards.
unrest or other external Valid Safety Cases on all operated
cause. assets.
Consequences may include injury, loss Robust crisis management and
of life, environmental damage and emergency response processes in place
disruption to business and tested against.
activities. Senior management visits to operated
facilities to demonstrate commitment
to HSES values.
Learning from internal and
third-party incidents.
Insurance against Business
Interruption.
-------------------------------------- -------------------------------------- --------------------------------------
Host government: Premier operates or maintains Premier strives to be a good
political and fiscal risks interests in some countries where corporate citizen globally, and seeks
political, economic and social to forge strong and positive
transition is taking place or there relationships with governments,
are current sovereignty disputes. regulatory authorities and the
Developments in politics, communities where we do business.
security, laws and regulations can Premier engages in respectful
affect our operations and earnings. industry-wide lobbying and
Consequences may include sustainable corporate responsibility
expropriation of property; and community investment programmes.
cancellation of contract rights; Premier maintains a portfolio of
limits interests which includes operations
on production or cost recovery; in both lower and higher
import and export restrictions; risk environments.
price controls, tax increases Rigorous adherence to Premier's
and other retroactive tax claims; Sustainability Policy and Global Code
and increases in regulatory burden of Conduct.
or changes in local laws Monitor and adhere to local laws and
and regulations. regulations.
Consequences may also include Active monitoring of the political,
threats to the safe operation of economic and social situation in
Company facilities. areas where we do business,
including business continuity plans
tailored to pre-defined levels of
alert.
-------------------------------------- -------------------------------------- --------------------------------------
Climate Change Adverse investor and stakeholder Premier is proactively taking steps
sentiment towards oil and gas sector to address the impact on society of
impacting investability. its operations. We
Cost to comply with climate change set time-bound climate change
related operational regulations and objectives consistent with Paris
disclosure requirements. Agreement targets and also
Longer-term disruption to Premier's demonstrate how we meet those
projects and operations as a result objectives over time, specifically:
of changing weather Board-owned Climate Change Policy
patterns and more frequent extreme with strategy implementation
weather events. monitored by an Executive Climate
Longer-term reduction in demand for Change Committee.
oil and gas products due to the pace Setting of corporate goals and
of commercial deployment annual targets within Group
of alternative energy technologies corporate scorecard and business
and shifts in consumer preference for unit KPIs.
lower greenhouse Physical and transitional climate
gas emission products. change risks associated with our
activities are identified
and actively managed.
We are committed to ensuring that
all new projects sanctioned by us
will deliver net zero
emissions, through our Low Carbon
Projects by Design initiative,
supplemented where necessary
by investments to offset emissions
using carbon credits.
We are undertaking a comprehensive
asset-by-asset review during 2020
identifying projects
to reduce carbon emissions within
our operations and throughout our
supply chain.
Carbon pricing and scenario analysis
is integrated into investment
decision-making.
Climate change performance and
supporting processes with
stakeholders are communicated in
a transparent manner.
Dialogue with shareholders and
lenders on climate change actions.
Collaboration with industry and
other associations on climate change
adaptation and mitigation,
including a framework by which the
industry works towards a target of
net zero greenhouse
gas emissions.
Promote investability though
positive recognition in the annual
FTSE4Good and CDP climate
change reporting submissions.
-------------------------------------- -------------------------------------- --------------------------------------
Key Performance Indicators (required under DTR 4.1.9)
Working interest production (kboepd)
Objective
Premier aims to maximise production from its existing asset base
and, over time, to deliver production growth.
2019 Progress
-- Group Production of 78.4kboepd
-- Group operating efficiency >90%
-- First gas from BIG-P
-- Formal government approval of Catcher North and Laverda developments
Reserves and resources (mmboe)
Objective
Premier aims to grow its reserves and resources base through a
combination of successful exploration and selective
acquisitions.
2019 Progress
-- Upward revision in 2P reserves estimates at the Catcher Area and Natuna Sea Block A
-- Premier upgraded its Zama resource estimates following successful 2019 appraisal campaign
Operating costs US$/boe
Objective
Premier aims to minimise costs from operations without
compromising on health, safety and integrity.
2019 Progress
-- Operating costs of US$18/boe, of which US$11/boe related to
field opex and US$7/boe to FPSO lease costs
-- Low cost base supported by high operating efficiency
Covenant Leverage ratio
Objective
Premier aims to have sufficient headroom against its covenant
leverage ratio to ensure continued covenant compliance and access
to liquidity throughout the commodity price cycle.
2019 Progress
-- Covenant leverage ratio (covenant net debt/ EBITDAX) reduced to 2.3x (2018: 3.1x)
-- Increased EBITDAX of US$1,230 million, up c.13%
Operating cash flow (US$ million)
Objective
Premier aims to maximise cash flow from operations to maintain
financial strength, meet its debt obligations, invest in the future
of the business and deliver long-term returns to shareholders.
2019 Progress
-- Improved cash margins due to increased UK oil production
-- Catcher reached cash payback in October
-- Strong operating cash flow generated by the Group's Asian
assets driven by high uptime and tight cost control
Net debt (US$ billion)
Objective
Premier aims to reduce the absolute level of its net debt in
order to address the imbalance in its capital structure, to ensure
compliance with its financial covenants and to provide the Company
with future financial flexibility.
2019 Progress
-- Net debt reduced from US$2.3 billion to less than US$2 billion
-- Record free cash flow generation of US$320 million
-- Net debt reduced by over US$900 million since October 2017
ROCE %
Objective
Premier is focused on effective capital and balance sheet
management, and quality of earnings through driving operational and
technical efficiencies.
2019 Progress
-- Increased operating cash flows from high operating
efficiency, higher realised sales prices and tight cost control
-- Record free cash flow utilised to repay debt, with capex focused on highest return projects
Total recordable injury rate ('TRIR')
Objective
Premier is committed to managing its operations in a safe and
reliable manner to prevent major accidents and to provide a high
level of protection to its employees and contractors.
2019 Progress
-- No recordable injuries at any of Premier's offshore operated
facilities, supply bases and offices worldwide
Process safety events - IOGP Tier 1 and Tier2
Objective
Premier aims to maintain the highest standards of operational
integrity to prevent any release of hazardous material from primary
containment.
2019 Progress
-- In 2019, there was one Tier 1 Process Safety Event relating
to an oil release at Catcher and one Tier 2 Process Safety Event
relating to a gas release at Catcher
GHG intensity - operated assets ( kgCO2e/boe)
Objective
Premier is committed to proactively taking steps to address the
Group's impact on society and in particular to minimise the climate
impact of its activities.
2019 Progress
-- Greenhouse gas intensity of the Group's operating assets at a record low
-- Commitment to ensuring that all operated projects will be
developed on a net zero emissions basis (Scope 1 and Scope 2)
Directors' responsibility statements (required under DTR
4.1.12)
The Directors are responsible for preparing the Annual Report
and Financial Statements in accordance with applicable law and
regulations.
Group financial statements
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
are required to prepare the Group financial statements in
accordance with International Financial Reporting Standards
('IFRSs') as adopted by the European Union ('EU') and Article 4 of
the International Accounting Standards ('IAS') Regulation and have
also chosen to prepare the Parent Company financial statements in
accordance with Financial Reporting Standard 101 Reduced Disclosure
Framework. Under company law the Directors must not approve the
financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Company and of
the profit or loss of the Company for that period.
In preparing the Parent Company financial statements, the
Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and accounting estimates that are reasonable and prudent;
-- state whether Financial Reporting Standard 101 Reduced
Disclosure Framework has been followed, subject to any material
departures disclosed and explained in the financial statements;
and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
In preparing the Group financial statements, International
Accounting Standard 1 - 'Presentation of Financial Statements' -
requires that Directors:
-- properly select and apply accounting policies;
-- present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
-- provide additional disclosures when compliance with the
specific requirements in IFRSs are insufficient to enable users to
understand the impact of particular transactions, other events and
conditions on the entity's financial position and financial
performance; and
-- make an assessment of the Company's and Group's ability to continue as a going concern.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and Group and enable them to
ensure that the financial statements comply with the Companies Act
2006. They are also responsible for safeguarding the assets of the
Company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website (www.premier-oil.com). Legislation in the United
Kingdom governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Directors' responsibility statement
We confirm to the best of our knowledge:
1. the Group financial statements, prepared in accordance with
International Financial Reporting Standards, as adopted by the EU,
give a true and fair view of the assets, liabilities, financial
position and profit or loss of the Company and the undertakings
included in the consolidation taken as a whole;
2. the Strategic Report includes a fair review of the
development and performance of the business and the position of the
Company and the undertakings included in the consolidation taken as
a whole, together with a description of the principal risks and
uncertainties that they face; and
3. the Annual Report and Financial Statements, taken as a whole,
are fair, balanced and understandable and provide the information
necessary for shareholders to assess the Company's position and
performance, business model and strategy.
This responsibility statement was approved by the Board of
Directors on 4 March 2020 and is signed on its behalf by:
Tony Durrant
Chief Executive Officer
Richard Rose
Finance Director
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
ACSPPUUGCUPUUBP
(END) Dow Jones Newswires
April 22, 2020 09:00 ET (13:00 GMT)
Harbour Energy (LSE:HBR)
Historical Stock Chart
From May 2024 to Jun 2024
Harbour Energy (LSE:HBR)
Historical Stock Chart
From Jun 2023 to Jun 2024
